Telefónicawatch
This release
: #131
December 2018: 68pp
Releases/year: 10+
Click for more details of this release

Executive brief

Group

Management Update: Telefónica ups guidance, rediscovers strength [p.6]

  • Table: Telefónica, selected financial data, Q3 FY18
  • NGNs paving the way for continued momentum
  • LatAm proceeds on choppy seas
  • Table: Telefónica Group, performance by unit, Q3 FY18
  • Next phase of transformation: make digital pay

Acquisitions and disposals: Insurance firm sale kicks off latest round of debt reduction [p.13]

  • Telefónica nears Mexico exit…
  • Telefónica hopes to raise more through data centre sales

People [p.15]

  • Navarro goes Global in 2019.
  • Table: people movements

Global Resources

5G: Telefónica promotes Málaga as third 5G city [p.18]

  • 5G: not to be seen in isolation

Partners: Telefónica ties with IBM on blockchain [p.21]

  • VMware trumpets partnership with Telefónica

UNICA: Mavenir jumps on UNICA bandwagon [p.24]

  • Local customisation of a global platform

Digital services

Telefónica unveils AI ethics [p.28]

Digital-identity verification boosts ElevenPaths' ecosystem ambitions [p.30]

LUCA selects Stratio to help customers manage big data use [p.31]

  • Wayra UK forms new incubator programme with Innogy

Latin America

Brazil: TIM and Vivo extend 3G infrastructure-sharing in Brazil [p.36]

  • Telefónica Brasil has high hopes for new government

Mexico: Telefónica México launches mobile advertising offering [p.40]

  • Growing ecosystem of advertising partners
  • Table: LUCA's portfolio of media and advertising services

Europe

Germany: SIAE digs itself in further with O2 Germany deal [p.44]

  • O2 unveils more partners to underpin fixed and mobile services
  • GasLINE another new partner as O2 opens its arms to network alliances
  • Proof in network performance test, with 2019 set to be a big year
  • O2 extends business security solutions with McAfee

Spain: Telefónica, Huawei get pally on President Xi's Spain trip [p.52]

  • Spanish oasis for Huawei
  • Telefónica España claims converged consumer cybersecurity world-first

UK: Ericsson fault banjaxes O2 network [p.58]

  • Headlines highlight O2's '87p' compensation, while Ericsson could be hit for £100m
  • O2 takes Massive step towards London 5G launch
  • O2 UK claims European small-cell fibre first for driverless tech

Further reading

Index

Symbols

3GPP 18
3M 64
21st Century Fox
 - Sky plc 58

A

Advent 14
Aerial Technologies 29, 64
AI 28, 29, 31, 32, 63, 64
Alastria 22
Alphabet
 - Google 56
Altán Redes
 - Red Compartida 42, 64
Altiostar 25
Altran 25
América Móvil 36, 42
 - Claro 36, 39, 42, 64
Analysys Mason 25
Anatel 36
Apple 57
 - iOS 49
 - iPhone 57
Aquto 41
Arqiva 61, 65
AT&T 14, 63

B

Bank of America Corp. 14
Beerides 34
BP 16
BT Group 16, 22, 53, 65
Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen (Federal Network Agency for Electricity, Gas, Telecommunications, Postal Service and Railways, BNA/BNetzA/RegTP, Germany) 45

C

Carrier Blockchain Study Group 22
Cerberus 14
China Mobile 37
China Telecom 37
CK Hutchison 16
 - H3G
 - UK 16
CNMC 56
Colt Group 22
Community of Madrid 57
Conadecus 39

D

Datami 40, 41
Dell Technologies
 - VMware 23, 63
Deutsche Telekom 45, 65

E

Enerbrain 34
Energia 64
Entel 39, 42, 64
Ericsson 19, 25, 38, 58, 59, 65
ETNO 10
European Union 12, 19, 45, 51
EVezy 34
EWE TEL 46, 65
ExCel Arena 19

F

Facebook 25
 - Telecom Infra Project 25
Facua 56
FIWARE 19
Forrester 32, 64
Futurecom 37, 38

G

GasLINE 46, 47, 65
Genesys 56
Grupo Catalana Occidente 13, 63
GSM Association (GSMA) 15

H

Havas 40, 41
Hortonworks 32
HP, Inc 26
Huawei 18, 19, 25, 32, 50, 52, 53, 62, 63, 65
Humanising Autonomy 34

I

IBM 21, 22, 63
IFT (Mexico) 42
Innogy 64
innogy SE 33
Intel 29, 64
Intel Capital 29, 64

K

Kibo Ventures 29
KKR 14

L

Liberty Global 14, 45
London Stock Exchange 12

M

MásMóvil
 - Yoigo (Xfera) 56
Mavenir 24, 25, 40, 41, 63
McAfee 49, 50, 54, 65
Merrill Lynch 14
Microsoft 51
Millicom 14, 63
Morgan Stanley 62
Motorola 41
MVNOs 58, 59

N

NET 25
Netflix 42
NETSCOUT 25
NGN Fiber Network 47
Nokia 14, 19, 20, 57, 60, 63
Nuage Networks 14

O

Oi SA 36, 37
Omnicom Group, Inc
 - Organic 7
Omniflow 34
Orange 15, 19, 57
 - Spain 57

P

Parallel Wireless 25
PCCW 22

R

RADCOM 25
Red Hat 25
Regions
 - APAC
   -- Australia 53
   -- China 18, 37, 52, 53, 65
   -- Japan 59
   -- New Zealand 53
 - EMEA
   -- Czech Republic 45
   -- Europe 6, 7, 8, 10, 12, 14, 19, 22, 23, 26, 41, 42, 43, 45, 50, 51, 57, 61, 62, 63, 65
   -- France 41
   -- Germany 15, 16, 24, 25, 33, 38, 44, 45, 46, 47, 48, 49, 50, 51, 53, 65
   -- Ireland 12
   -- Italy 44
   -- Portugal 61
   -- Spain 7, 8, 14, 18, 19, 22, 26, 31, 38, 50, 52, 53, 54, 55, 56, 57, 61, 63, 65
   -- UK 7, 8, 9, 12, 16, 33, 34, 38, 41, 53, 58, 59, 60, 61, 62, 64, 65
 - Latin America 6, 7, 8, 26, 31, 35, 38, 41, 42, 45, 55, 57, 64
   -- Argentina 9, 25, 26, 38, 40, 64
   -- Brazil 8, 9, 15, 16, 26, 36, 37, 38, 40, 41, 64
   -- Central America 8, 9, 13, 14
   -- Chile 9, 26, 39, 42, 64
   -- Colombia 6, 9, 25, 26, 39, 64
   -- Costa Rica 14, 26
   -- Ecuador 9, 26
   -- El Salvador 14, 26
   -- Guatemala 14, 26
   -- Mexico 6, 8, 9, 11, 14, 26, 40, 41, 42, 64
   -- Nicaragua 14, 26
   -- Panama 14, 26
   -- Peru 9, 16, 25, 26, 42, 64
   -- Uruguay 9
   -- Venezuela 9, 16
 - North America
   -- USA 53
Rivetz 22, 30, 64

S

Samsung 26
SIAE Microelettronica 44, 45
Singtel 15
Sodexo 26
Softbank 59
Stratio 31, 32, 64

T

TDLC (Chile) 39, 64
Technolgies
 - QR codes 57
Telecom Italia
 - Telecom Italia Mobile 36
 - TIM Brasil 36
Telefónica Group 6, 9, 10, 11, 12, 13, 14, 15, 16, 20, 24, 28, 29, 31, 36, 38, 52, 57
 - Digital services
   -- AURA 56
   -- Axonix 41
   -- ElevenPaths 22, 30, 49, 50, 54, 64
   -- LUCA 16, 31, 32, 40, 41, 51, 64
   -- M2M 57
   -- Open Future 16, 33, 34
   -- Statiq 41
   -- Synergic Partners 16, 51
   -- Wayra 16, 33, 34, 64
   -- Weve 41
 - Directors
   -- de Paz, Javier 16
   -- Linares, Julio 15, 16
 - Europe
   -- E-Plus 44, 48, 50
   -- Germany 44, 45, 46, 47, 48, 49
   -- Giffgaff 58
   -- O2 8, 16, 44, 45, 46, 47, 48, 49, 50, 57, 58, 59, 60, 61, 62, 65
   -- Spain 8, 9, 16, 19, 54, 55, 56, 57, 65
   -- Telefónica Deutschland 8, 16, 19, 24, 44, 45, 46, 47, 48, 49, 50, 51, 63, 65
   -- Telefónica NEXT 51, 65
   -- UK 16, 58, 59, 60, 61, 62, 65
 - Executives
   -- Abasolo, Laura 6
   -- Álvarez-Pallete Lopez, José María 10, 11, 12, 29, 63
   -- Carbajo, Cayetano 24, 45, 48
   -- Cortez, Pedro 16
   -- Dacre, Andrea 16
   -- De Carvajal, Pablo 16
   -- Dowd, Ben 16
   -- Dupuy de Lome Corchado, Enrique 16
   -- Evans, Mark 58
   -- Gallardo Rico, David 16
   -- Gebara, Christian 15
   -- Gil Lizasoain, Elena 32, 40
   -- Gilpérez López, Luis Miguel 16
   -- Haas, Markus 45
   -- Lappoehn, Jens 51
   -- Larder, Paul 16
   -- Lluch, Jaime 19
   -- Lopez Lozano, Maria Victoria 16
   -- Lösing, Alfons 47
   -- Manzanares, Javier 16
   -- Martín-Villa, Gonzalo 21
   -- Mata, Joaquin 19
   -- McMahon, Alastair 16
   -- Navarro, Eduardo 15, 16, 37
   -- Newton, Tom 16
   -- O'Reilly, Brendan 60
   -- Pérez, Pedro Pablo 30
   -- Plumb, David 16
   -- Rupprecht, Alexander 16, 50
   -- Sanchez de Lerin, Ramiro 16
   -- Stewart, Gary 33
   -- Tharntong, Louise 16
   -- Vilá, Ángel 6
 - Ex-executives
   -- Genish, Amos 15
 - Global Resources
   -- Cornerstone Telecommunications Infrastructure 62
   -- Telefónica Business Solutions 26, 63
   -- Telefónica International Wholesale Services 26, 63
   -- Telxius 13, 14
   -- UNICA 12, 24, 25, 41, 63
 - Latin America
   -- Brazil 8, 15, 16, 36, 37, 38, 40
   -- Mexico 8, 14, 40, 41
   -- Vivo 36, 37, 38, 40, 64
 - Movistar+ 55
 - On The Spot 26
 - Products and services
   -- Fusión 55
   -- Movistar+ 55
   -- Movistar Cloud 55
   -- Movistar Play 9
   -- Movistar TV 39
   -- O2 o 47, 59
 - Telefónica Emisiones 12
Telstra 22
Tesco 58
 - Tesco Mobile 58
Tigo 14
Transport for London 59

U

United Internet 65
United Nations 29

V

Verizon Communications 14
Vitroconnect 46, 47
VMware 23, 63
Vodafone Group 8, 25, 45, 47, 48, 57, 62, 65
 - Germany 45, 47, 48
 - Spain 57
 - UK 62

W

Wegow 56
Wireless Infrastructure Group 61

Z

Zhilabs 26
ZTE 50, 53, 62, 65

  • Telefónica enters ‘new’ strategic partnership with Huawei, signed off by the Spanish government during state visit by China. The aim is to deepen collaboration on 5G, fibre broadband, and digital services.
  • Madrid’s vote of confidence in Huawei comes against a backdrop of growing international concern, ahead of 5G rollout, about national security risks posed by the Chinese supplier.

A state visit by China to Spain, which brought together China’s President Xi Jinping and Spain’s Prime Minister Pedro Sánchez for talks on promoting business ties between the two countries, saw Telefónica Group proclaimed (again) as a close ally of Huawei Technologies, which is increasingly under fire over security matters (see below).

According to a ‘Strategy Cooperation Framework Agreement’ between the two companies, they will pool resources on development of 5G, fibre broadband, and digital services. Details are scant about what this might mean in practice, but one broader element of the arrangement — as reported by some Spanish media — is that it will allow Spanish and Chinese operators easier access to each other’s markets. Again, how this might play out on the ground was not made clear.

Although the framework agreement was apparently signed off by the Spanish government, La Información reported that “top management” from both Telefónica and Huawei supported the deal.

Encouraging greater mutual access to Chinese and Spanish markets was a common thread running through the other nine commercial agreements signed off during President Xi’s state visit to Spain – the first of its kind in the last 13 years. They covered various industry sectors, including food, finance, automotive, and energy. Sánchez said he aimed to take Spain’s business relationship with China “to a new level”. Central to plans aimed at strengthening ties between the two countries is the newly-created Spain-China Business Advisory Council, which comprises seventeen Spanish companies and fifteen Chinese companies. According to local media reports, however, Telefónica is not among the Spanish contingent. Huawei, though, sits in the advisory council on China’s side.

Spanish oasis for Huawei

Huawei no doubts welcome backing from the Spanish government, not least because of an increasingly hostile environment in places such as Australia, Germany, Japan, New Zealand, UK, and the USA over allegations of security risk to ‘critical national infrastructure’.

The Australian government effectively barred Huawei and smaller rival ZTE from 5G rollout, mainly over concerns about what they feel as excessive influence from the Chinese government , while closer to home in the UK and Germany — markets in which Telefónica has a presence — things are turning decidedly more uncomfortable for the Chinese supplier.

In the UK, incumbent BT is facing government warnings about using Huawei equipment, although Telefónica maintains that its exposure to the Chinese supplier’s kit is not nearly as great in the UK as its network rivals (Telefónicawatch, #128).

Over in Germany, according to a recent report by Reuters, some ‘senior officials’ — unnamed, but apparently from the country’s interior and foreign ministries — are lobbying the government to prevent Chinese suppliers from building 5G infrastructure. An auction of 5G-friendly frequencies is slated for early-2019 (Telefónicawatch, #131). Reuters says German officials have exchanged their security qualms with counterparts in Australia and the USA.

One thing ruffling feathers is China’s National Intelligence Law. Approved in 2017, the law apparently states that Chinese organisations and citizens shall “support, cooperate with, and collaborate in national intelligence work”. The fear is that Huawei (and ZTE) could be asked to enable ‘backdoors’ in infrastructure, so allowing China access for the purposes of spying or sabotage.

Seemingly close connection with the Chinese government in securing closer strategic ties with Telefónica may do little to allay concerns elsewhere that Huawei is not being leaned on in some way by state authorities for the purposes of espionage. For its part, Huawei has always strenuously denied allegations of wrongdoing.

Image: Spanish government

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